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Management Side
Billerud Michigan paper mill could get $1 billion upgrade

MICHIGAN (From news reports) -- A $1 billion investment could transform an Upper Peninsula paper mill and retain 1,240 jobs.

Billerud, a Swedish paper and pulp manufacturer, is eyeing the Escanaba Mill to upgrade from producing paper to making an advanced paper product known as paperboard or cartonboard. The stiff multi-ply product is use for packaging cosmetics, healthcare, beverages and candy products.

"The company's investment will impact the state's overall economy, employing an estimated 1,800 construction workers for new building construction and renovations, improvements to infrastructure and electrical upgrades," said Michigan Economic Development Corporation CEO Quentin Messer.

Billerud acquired the Escanaba facility when it bought parent company Verso for $825 million earlier this year. State incentives could help lure the manufacturer to choose Michigan over a competing site in Wisconsin.

The Michigan Strategic Fund approved a 15-year tax break for Billerud during its Tuesday, Dec. 13, board meeting. The Forest Products Processing Renaissance Zone incentive is worth $29.4 million.

"It's going to be a transformational intergenerational project, especially for that area," said Jeremy Webb, senior business development project manager for the Michigan Economic Development Corporation.

The mill, sitting on the banks of the Escanaba River, has been making paper since 1911. It's one of the top employers in the Upper Peninsula's Delta County, where it has an estimated $360 million annual economic impact on the area.

Without Billerud's investment, the mill would likely close. The state economic board estimates a shuttered mill would cost the region $3.6 billion over a 10-year period.

Billerud deputy president Kevin Kuznicki said the project will "set the mill up for generations to come."

"Today's request is an important step to enable the company to invest up to a billion dollars at the Escanaba Mill and, in turn, change the future of that mill from a declining growth market to a growing market in the North American segment," he said.

The state economic board says the project will retain more than 1,200 jobs and create another 1,800 construction jobs over three years. The jobs will pay an average of $43.65 an hour - much higher than the target livable wages of $21.75 and $17.30 in the surrounding communities, according to a project memo.

Kuznicki says it will also bring "some of the most advanced technology and sustainability processes in the cardboard industry to the U.P. - and frankly to the U.S."

State leaders say they are still working to secure the project in Michigan.

"I think it will be premature to discuss any additional incentives," Messer said.

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